Mumbai-based gaming firm Nazara receives approval to acquire Smaaash Entertainment

Mumbai-based esports and gaming company Nazara Technologies has been announced as the successful resolution applicant for Smaaash Entertainment Private Limited, a sports entertainment firm currently undergoing a corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. 

On August 7, 2024, Nazara received a letter of intent (LOI) from the resolution professional of Smaaash, confirming the approval of its resolution plan by the Committee of Creditors (CoC). 

The move marks a significant step forward in Nazara's strategy to expand its portfolio in the gaming and entertainment sector.

The development comes after Nazara acquired UK-based gaming studio Fusebox Games in an all-cash transaction for Rs 228 crore ($27.2 million).

Additionally, its subsidiary, Absolute Sports, acquired all assets of US-based gaming content firm Deltias Gaming for Rs 7.5 crore.

Acquisition awaits legal and regulatory approvals

While Nazara Technologies has received the LOI, the acquisition is not yet finalized.

The resolution plan submitted by Nazara is subject to approval from the National Company Law Tribunal (NCLT) and other necessary regulatory authorities.

The company has also secured preliminary approval to obtain a performance bank guarantee of up to Rs 20 crore from Standard Chartered Bank.

This guarantee is intended to be in favor of the resolution professional overseeing Smaaash Entertainment’s insolvency case. The finalization of this acquisition will depend on meeting all these legal requirements.

Smaaash Entertainment’s financial struggles

Smaaash Entertainment, known for its sports-centric entertainment offerings, has faced significant financial difficulties, leading to its admission into insolvency in May 2022.

The company owed around Rs 452 crore to various creditors, including Edelweiss Asset Reconstruction Company, Yes Bank, SIDBI, and Mabella Investment Advisors.

The ongoing insolvency proceedings have seen several rounds of resolution attempts, with the previous ones being scrapped due to litigation and other complications.

The current process, backed by Nazara, is the third attempt at resolving Smaaash’s financial troubles.